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The Truth about Adobe Systems Incorporated v. Dale Thompson DBA Appletree Solutions and the BSA

Nov 03, 2014

If you have received a demand letter from the business software alliance, here is something you should know.

In our experience, the BSA | The Software Alliance (BSA) has referred to the Appletree case in 2012 (Adobe Systems Incorporated v. Dale Thompson DBA Appletree Solutions), to try to convince people that resisting the BSA’s demands can be a costly mistake. This was a case in which almost $340,000 in damages were awarded to the BSA because of software piracy.

In our opinion, the Appletree case should not be feared. The reality is that there were a very specific set of facts at play in the case, which likely do not apply to your situation. If you are not actively pirating and distributing software; if you are, like most of our clients under scrutiny from the BSA, simply someone who may have been less diligent in policing their software purchases or use; and if you retain a lawyer who is present at the hearing, then the outcome in Appletree is extremely unlikely to happen to you. The courts in Canada do not always side with software corporations. In fact, the opposite is more likely true.

The law provides the judges with discretion in awarding penalties for copyright violations. While the BSA will tell you that you could be liable for up to $20,000 per infringement, the truth is that the penalty assessed could also be as low as $200 per infringement. For example, Section 38.1(2) of the Copyright Act says:

If… the defendant satisfies the court that the defendant was not aware [that it infringed copyright], the court may reduce the [statutory penalty] to less than $500, but not less than $200.

In Appletree, the BSA was dealing with, if you will pardon the pun, a real bad apple. The Court knew it and threw the book at them. But in law, one rotten apple does not spoil the barrel. In every case, the court will look at what you have done, why you did it, and whether or not the BSA is being reasonable in its approach. Indeed, the ability of the BSA to be successful will be limited if the Court feels they are being too heavy-handed or unfair in their approach.

Section 38.1 (5) of the Copyright Act says:

In exercising its discretion [to award a statutory penalty] court shall consider…

b) the conduct of the parties before and during the proceedings.

In other words, if the BSA (one of the “parties”) does not act reasonably in its approach, the court may decide to reward little to no damages.

What does this mean to you? It means that despite their strong approach, a negotiated settlement is a much more likely outcome. With competent counsel, there is always a better a deal to be had. We know, because we have done it.

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